Eskom told lawmakers on Wednesday that a fire in the gas air heater of Kusile Unit 5, which occurred during a commissioning exercise on September 17, represented a major “setback” and could delay the 800 MW unit’s entry into commercial operation by up to a year.

Under the revised scheduled for the much-delayed Kusile build programme, Unit 5 was expected to enter into commercial operation in December 2023.

Addressing a Standing Committee on Public Accounts meeting, COO Jan Oberholzer said the cause of the fire had not yet been determined by the contractor, Mitsubishi Hitachi Power Systems, which he referred to as MHI, but that sabotage was not currently suspected.

He noted that a similar incident had occurred during the commissioning of Kusile Unit 2, which had delayed the introduction of the unit by 12 months, and that a similar delay was, thus, being assumed preliminarily for Unit 5.

Eskom expected to receive details outlining MHI’s new commissioning plan for the unit by Sunday, October 23, but Oberholzer confirmed that the fire represented a major setback, particularly in a context where the utility urgently required additional generation capacity to reduce the risk of loadshedding.

“Unfortunately I have to be open that unit number five will not be placed into commercial operation by December 2023,” he said, signalling that initial indications were that the unit might achieve that milestone only in December 2024.

“Again, I need to emphasise that this was during the commissioning of that specific component and we don't believe that there was any foul play.”

The commercial implications were still being calculated, but it was estimated that it would add some R150-million a month to Kusile’s interest during construction (IDC).

Work on Unit 6, meanwhile, was continuing and it remained on schedule for commercial operation by the middle of 2024, with efforts under way to bring that date forward to May 2024.

MEDUPI UNIT 4

At Medupi meanwhile, where all six units were in commercial operation prior to a catastrophic hydrogen explosion at Unit 4 in 2021, Eskom was planning to return Unit 4 to service only in September 2024.

This, together with extended maintenance at the Koeberg nuclear station – which had been further prolonged because the replacement of the three steam generators at Unit 2 had to be postponed earlier this year owing to Eskom’s failure to complete the required containment facility on time – would increase the risk of power cuts.

The energy-short grid would be without at least one unit of Koeberg for a period of about a year and a half, which would increase the intensity of loadshedding by one stage every time it was implemented.

Nevertheless, Oberholzer expressed confidence that Koeberg would secure its life-extension licence before the current licence expired in mid-2024.

Oberholzer again confirmed that the Koeberg life-extension capital expenditure was far higher than the R20-billion announced in 2010, but said he could not yet provide the new value.

Lawmakers were also provided an update on the cost and cost to completion of both Medupi and Kusile, which were set to cost R145-billion and  R161.4-billion to complete respectively, before IDC.

The remaining cost to complete Kusile was stated as being R14-billion, while the figure for Medupi was pegged at R18.95-billion.

The Medupi figure excluded the cost of installing flue gas desulphurisation (FGD), which could involve an additional R35- to R40-billion and remained a condition of a World Bank loan that had been raised to help fund the project.

CEO André de Ruyter reported that the FGD technology installed at Kusile was a single point of failure and that trips associated with the plant were a key reason for Kusile’s poor energy availability factor (EAF) currently.

Eskom was pursuing an operations and maintenance contract with General Electric, which supplied the FGD to Kusile, in an effort to improve the plant’s performance.

The utility, which has never before operated an FDG facility, was also pursuing skills transfer ahead of the deployment of FGD at Medupi, whose EAF had risen to 85%, excluding the out-of-service Unit 4.

Although Eskom had not awarded and FGD contract at Medupi, improving its FGD skillset was seen as crucial to ensuring that Medupi’s performance did not dip once the pollution-abatement technology was eventually installed in the 2027/28 financial year.

NEW LARGO PROGRESS?

There was also an intensification of efforts under way to nail down permanent coal supply agreements at Kusile, which was still receiving coal by road.

Negotiations between Eskom and Seriti on a phased coal supply agreement (CSA) with the near-by New Largo operation were said to be advanced and the utility had also requested Seriti to develop a business case to build, operate and maintain a conveyor system to minimise the number of trucks entering the station.

Eskom said the signing, by year-end, of a long-term Pit D CSA with New Largo would allow Seriti to build a conveyor, which was anticipated to be in operation by June 30, 2024.

As a result of the delay in concluding a CSA with Eskom, Seriti had advised the utility that it had designated New Largo as an export mine, with Eskom to receive so-called middlings product from its coal beneficiation process.

De Ruyter said that Eskom was “comfortable” with the quality of these middlings and that the current priority was to migrate as much supply as possible to conveyor and rail, away from road.

However, he confirmed that poor coal quality as well as coal theft remained significant challenges and that criminal networks had penetrated its coal value chain.

In some instances, coal bought and paid for by Eskom was being replaced by discard and the Eskom quality coal was being trucked to ports for export, particularly as demand surged following Russia’s invasion of Ukraine.